End-to-End Process Win Hearts and Minds Business Led

The Business Benefits of GIS: An ROI Approach

Benefits Driven

● Treat the return on investment (ROI) study as a project:

● Defined group of stakeholders who will contribute

● Project plan with start and end dates and well-

defined activities

● Active stakeholder management

● Deliverables● Define your ROI project timeline.

● Build strengths, weaknesses, opportunities, threads (SWOT) analysis of your existing geographic information system (GIS) implementation or past attempts.

● Identify key stakeholders and socialize ROI project, preparing for step 2.

ROI Study Project

TimelineSWOT Analysis

Step 3: Prioritize Business BenefitsStep 1: Prepare for ROI Project

● Practically determine what will need to be done to deliver the benefits.

● Distill the program into component parts (hardware, software, data, etc.).

● Seek to combine like projects together, not 1:1 to each benefit opportunity.

● Take an enterprise view, not an application

view.

● Be pragmatic and technology neutral.

● Use practical approaches to deal with complexity.

Project Description

Template

Program Pyramid

Step 4: Construct GIS Program

1 2

● Identify business opportunities for GIS by interviewing your executives.

● The objective is to link GIS opportunities to organizational strategy and objectives.

● Utilize structured interview techniques and scripts.

● Focus on perceived challenges or problem areas in the organization.

● Take time to involve and educate executives, but don’t “sell” GIS to them.

Interview Template

Step 2: Identify Business Opportunities

3 4 5 6 7 8 910

● Use the information gathered from your executives during interviews and follow-up meetings with their direct reports.

● Collate it in the template provided.

● Identify metrics that relate to each opportunity.

● Avoid sensitive benefits (e.g., cost reduction via headcount).

● Use the template to help prioritize the benefits identified based on

● Value to the organization

● Ease of implementation (delivery)

● The template will generate a quadrant diagram.

● At this stage, value is subjective but is guided by executives.

Benefits Template Quadrant Diagram

Step 5: Define Project Control

Program

Governance

Delivery Team

Structure

● Inadequate governance is a leading cause of program failure.

● Ensure you have robust controls in place to be successful.

● Use the Project Governance Capability Maturity Model (CMM) to assess your team’s abilities.

● Expose your strengths and weaknesses.

● Shore up any weak spots, and be realistic.

● Define your delivery team structure (in-house versus external).

Step 6: Calculate Costs

Budget Model

● Assemble your GIS program budget forecast (capital expenditures [CapEx] and operational expenditures [OpEx]).

● Team with your finance department.

● Build your budget from the bottom up in a robust, defensible manner.

● Use the Budget Template to guide you through the budgeting process.

● Guidance is provided about capital versus operational expenditure, depreciation, and internal capitalization of labor.

● The output is used to populate the cost side of the ROI calculation.

Step 7: Quantify Benefits

Benefits Model

● Quantify all business benefits in tangible terms.

● This is one of the most challenging aspects of any ROI calculation.

● It requires you to model the impacts of GIS on workflow as an enabling technology (base case versus GIS case).

● Use the Value Driver Tree concept (benefits that enable other benefits).

● Tap a subject expert—get to the numbers.

● Study the Sensitivity Analysis and Benefits Realization Curve.

Step 8: Build Benefits Road Map

Benefits Road Map

● This is built from the discrete projects defined in step 4.

● It visually communicates the program activity on a quarterly basis.

● It focuses on benefits delivered, not project milestones.

● It provides a clear road map for the program.

● It must be realistic and achievable and have broad commitment from the business to succeed.

Step 9: Calculate Financials

ROI Financial

Calculations Model

● Team with the finance department.

● Use previous budget (cost) and benefits to calculate ROI, NPV, IRR, etc.

● The template provides fill-in-the-blank entry and automatically calculates financial

metrics.

● The template also provides guidance on interpreting the results (e.g., creates value or destroys value).

● It’s not just about a positive NPV; it is about successfully delivering on the promised benefit.

Step 10: Draft and Deliver Report

Final Report (Word)

● The final stage simply summarizes the results of the study, pulling it all together.

● At this stage, it should be for comprehensiveness, not to win a budget.

● Hearts and minds should have been won long ago, well before executives read the report.

● Normally, a Word-based report, plus an executive presentation or summary, is

produced.